As a kind of complex power machinery, diesel engine is being paid more and more attention to its condition monitoring and fault diagnosis technology. In the fault diagnosis field of diesel engine, the technique of signal process, character abstraction and identification method have formed a system, but there is a certain distance away from practical. This paper analyzes the common faults and influencing factor of diesel engine. The principle, characteristic and disadvantage of modern fault diagnosis technology, such as various time-frequency methods based on vibration signal, speed fluctuation method, iron content and spectrometry, grey system theoretical diagnosis method, artificial neural network and expert system fault diagnosis method, were reviewed. The difficulties and the development direction of diesel engine fault diagnosis were put forward in the end.